This case involves a hedge fund portfolio manager who was the founder and partner at a capital market investment advisory firm. The portfolio manager authorized a client hedge fund to pay $7.5 million to purchase a basket of illiquid securities from a personal friend and outside business partner. This friend was hired by the manager’s firm as a managing director. The manager told his friend to divest these personal securities holdings when he took the job at the investment advisory firm because they overlapped with securities that the hedge fund was also invested. The manager did not tell the hedge fund or any partners or managers at the investment advisory firm that he had a financial stake in some of the same securities that were sold into the hedge fund. The manager personally benefited from the sale because after the hedge fund purchased the conflicted securities, his friend wired him over $2 million of the sales proceeds into his personal savings account. The SEC brought an action against the manager for violating the Investment Advisors Act.